David McKay Wilson: County executives base career on tax levy

Jan. 4, 2013

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Property taxes — and their rise and fall — play an oversized role in the political winds that swirl around Lower Hudson Valley county governments.

Former Putnam County Executive Robert Bondi kept taxes level for several years as the tax base grew and sales taxes rose to pay for the growth in government spending. Rockland County Executive C. Scott Vanderhoef built his political career on keeping taxes low — until the past two years, when Rockland County taxes soared 48 percent.

When Vanderhoef in October said he would not seek a sixth, four-year term, he wore as a badge of honor — despite leaving his successor with a $95 million deficit — the fact that Rockland’s property-tax rate had remained well below what it was when he took office in 1994.

In 1997, when I was covering Westchester County politics, then-County Clerk Andrew Spano told me that he’d match Yonkers Democrat Vincenza Restiano’s pledge to cut the county tax levy by 15 percent over four years as an appeal to beleaguered taxpayers.

Spano worked hard to reach that goal, but eventually lost his crown in 2009 to Mount Pleasant Republican Rob Astorino, who has staked his tenure on his pledge to hold the line on county property taxes. He has delivered, with a 2 percent reduction in the tax levy since he took office in 2009, including no increase for 2013.

Astorino’s austerity, however, has come at a cost, with widespread county layoffs, higher fees for county services, reduced support for nonprofit agencies supplying social services and the questionable practice of borrowing to pay for annual operating expenses.

Westchester Board of Legislators Chairman Ken Jenkins’ decision to seek the Democratic nomination guarantees that the debate over Astorino’s tax record will remain center stage for the upcoming months.

“It’s fiscally irresponsible and morally reprehensible to borrow for operating costs, like tax refunds, while we dismantle the programs and amenities that have made the quality of life in Westchester what it is today,” Jenkins declared at his campaign kickoff Wednesday in White Plains.

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Astorino comes from the “Starve the Beast” school of government: hold the line on taxes, and shrink the government to live within those means. Borrowing for the tax refunds, however, would cost taxpayers $200,000 in interest over five years, but that’s a price Astorino was willing to pay.

Jenkins believes in the power of government to improve the quality of life with public spending that may result in increased property taxes.

“We’ve left $100 million on the table over the past three years,” he told Tax Watch. “If we’d gone up to the tax cap, we could have increased the tax levy by 4.5 percent, which is all people expect right now.”

Adding $100 million to the county’s tax levy would have raised the levy by 18 percent. A 4.5 percent increase would have raised $24 million.

At issue in 2012 was $13 million in tax refunds the board’s Democrats wanted to finance from the county’s reserve account.

Astorino, joined by the Westchester County Association, the Board of Legislators’ Republicans and two Democrats, argued that dipping into the reserve account would imperil the county’s AAA bond rating, which allows it to borrow with favorable terms.

They base those fears on a report from Moody’s Investors Service, a Wall Street ratings agency that issued a “negative” outlook to Westchester in 2012, based on the county’s declining reserves.

Fitch Ratings, meanwhile, noted that the fund balance was reduced, but did not change its outlook based on the reduction.

How dire is the situation? This year, the county had reserves of $137 million, representing 8 percent of the county’s annual budget.

School districts, meanwhile, are restricted to reserves of no more than 4 percent, yet Moody’s has granted AAA bond ratings to several districts in the region, including Chappaqua, Scarsdale and Rye.